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2. Does Porter Fail to Explain How the Factor and Demand Conditions That Mould a Nation’s Corporate Strategies, Business Structures, and Industrial Clusters Are Established? What Other Theories and Evidence Might Assist Such an Explanation?

2. Does Porter fail to explain how the factor and demand conditions that mould a nation’s corporate strategies, business structures, and industrial clusters are established? What other theories and evidence might assist such an explanation?

Porter explains what factor and demand conditions are, but he fails to explain how they are established. He defines then, and explains them in detail, but lack the most important aspect, which is how they are established. A theory like this is not of much use without the information about the way one can gain these advantages. Porter is always greatly praised for his great work in the management field and he does deserve some of this praise, but if he doesn’t manage to explain himself fully then maybe he is not as great as many people think. I will be going through Porter’s theory of national competitiveness and the diamond as well as the theory of national clusters. I will also then look at criticisms of Porter including Reich’s global webs and Dicken’s general criticism. To be able to determine if Porter fails to explain how factors and demand conditions that mould a nation’s corporate strategies, business structures, and industrial clusters are established one first must understand his general theories on national competitiveness which tie in with his diamond. The determinants of national competitiveness and the 4 corners of the diamond are factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. Factor conditions are “the nation’s position in factors of production, such as skilled labour or infrastructure, necessary to compete in a given industry.” (Porter, 1990) Demand conditions are the demand for the certain product or service in the home market. Related and supporting industries relates to the amount of supplier industries within the nation as well as other similar industries that are competitive on the international scale. Finally, Firm strategy, structure, and rivalry refer to “The conditions in the nation governing how companies are created, organized, and managed, and the nature of domestic rivalry.” (Porter, 1990) Below you can see Porter’s Diamond with the added aspect of government. It just shows the importance of the government in the development of national competitive advantage and how it has a role in every aspect of the diamond.

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Porter states that these “determinants, individually and as a system, create the context in which a nation’s firms are born and compete: the availability of resources and skills necessary for competitive advantage in an industry; the information that shapes what opportunities are perceived and the directions in which resources and skills are deployed; the goals of the owners, managers and employees that are involved in or carry out competition; and most importantly, the pressure on firms to invest and innovate.” (Porter, 1990) Competitive advantage is gained ultimately when the “home environment is the most dynamic and the most challenging.” (Porter, 1990) This in turn stimulates the firms to improve and expand their advantages over time. (Porter, 1990) Logically, Porter states that “Nations are most likely to succeed in industries or industry segments where the national “diamond”,…., is the most favorable.” (Porter, 1990) Not all firms will necessarily do well if the country has a good diamond. If it is very dynamic it could cause a problem for some firms because they might not all have access to the same skilled works or resources as other firms. In a very dynamic industry it is a kind of first come first serve. The firms that act quickly will be able to pick up the skilled labour and high quality resources. The firms that do perform well on a national level will then most likely prevail on the international level as well for the reasons just stated, being labour and resources. Another important aspect of nation competitiveness is that...

...Running Head: Business Level and Corporate Level StrategiesBusiness Level and Corporate Level Strategies
Geri E. Shaffer
Professor: Luke White
Business Admin Capstone (BUS 499)
Strayer University, Charleston Campus
7 September 2014
1
Business Level and Corporate Level Strategies2Business Level and Corporate Level Strategies
Analyze the business-level strategies for the corporation you chose to determine the businesslevel strategy you think is most important to the long-term success of the firm and whether or
not you judge this to be a good choice. Justify your opinion.
The company I decided to research and write about is Southwest Airlines. I recently flew
Southwest from Charleston to Minnesota and was surprised at first on how they operated but as I
thought about how they did business, like no seat assignments, I began to realize that this is a better
way because it allows people to fly at a much lower cost than other airlines. I feel the most
important business level strategy for Southwest is the Cost Leadership Strategy for their long-term
success. Although I was frustrated with the fact that I couldn’t sit...

...What Is Strategy ?
By Michael E. PorterPorter is a very well known economist specially appreciate for his work on strategic environment for firms ; and how to get competitive advantages.
The article we are about to discuss was written in 1996 for the Harvard Business Review.
The first thing this document tells us is to be certain to distinguish operational effectiveness and strategy.
A - STRATEGY: A MISUNDERSTANDING
For the last 50 years, companies struggled to reach the best productivity, the best techniques and the best tools. The result is that many companies have been frustrated not to be able to transform those gains into profitability. According to Porter, operational effectiveness (OE) is necessary but not sufficient. Of course, it can turn your company into a more profitable one, but most of your best practices will be identified and used by your competitors. So it will be hard to stay ahead of your rivals for a long time and they will probably reach your productivity level sooner or later.
Therefore, OE leads companies to harder competition (declining prices, pressure on costs) that will reduce investments for the long term. ItÃ¢â‚¬â„¢s what we call competitive convergence.
B - CONCENTRATION ON YOUR CORE BUSINESS AND TRADE-OFFS
ItÃ¢â‚¬â„¢s now necessary to focus on the others...

...STRATMAN
Business-level strategy
Dr.Veselin Blagoev
Strategic Management
Business-level strategy



Different ways of competing at the level
of the individual Business Unit (SBU)
How can competitive advantage be
sustained?
Hyper-competition
Levels of strategy
• Corporatestrategy (eg. Bela, Virgin, Nestle) –
the strategy of the parent company
– Which industries/markets should we be in?
– How is the corporate portfolio managed?
• Businessstrategy (e.g. Virgin Atlantic, Nestle
Babyfood)
– Tactics used by an SBU to compete in the market
• Generic strategies and how to sustain these
• Hyper-competition
• Operational strategy
– How resources, processes and employees are
configured to deliver business and corporatestrategyWhat is a Strategic Business Unit?
If there is a distinct market for the product
.
area/brand/line which requires
its own strategy and/or
the value-chain activities are the same or similar
e.g. Electrolux dishwashers and washing machines are in the
same SBU because they use similar technology and are
aimed at same customers.
e.g. Ford transit vans and Ford Ka’s are in different SBUs
because they are aimed at...

...Presentation and Report Structure
Introduction
The purpose of this report is to outline the 2005 enhancements to IBM’s “on demandbusiness” strategy, the tactical implementation steps and the reasons for the refresh.
IBM’s purpose is to provide holistic solutions to solve customers’ business needs and its vision is to be a global leader in BPTS. IBM is currently in the business of hardware and BPTS outsourcing with the objective of being recognised by customers as the most successful BPTS provider by delivering value.
The refreshed strategy statement is: To grow our ‘on demandbusiness’ through financing and driving efficiencies. This continues to place IBM in the BPTS, outsourcing and financing business.
Strategic framework
IBM’s currently well placed to take advantage in the forecast growth in the IT consulting market and the large Business Process Outsourcing (BPO) growth market growth that’s predicted. The market is trending towards an offshore delivery model for ancillary business services such as accounting or payroll and this segment is estimated by Deloitte Research to be $356 billion by 2008.
There are a number of recent new entrants from India into the consulting market all operating with a lower cost base than IBM. There is increasing competition on price with smaller...

...following: Yip’s Drivers of Internationalisation, Johnson’s Culture Web, Porter’s Diamond, Bowman’s Strategy Clock, Porter’s Generic Strategies and McKinsey’s 7-S Framework.
Understanding and using theories that analyse the internal and external environment can prove pivotal for managers. This can dictate their corporatestrategy and where they position themselves in the market. The telecommunications market has expanded rapidly over the past decade which has meant that understanding the industry and your competitors is vital for being successful in such a global and dynamic market.
Competing globally can really test the strength of a company’s corporatestrategy, including what markets to compete in and how this will affect their selling technique as well as a firm’s range of products. An affective corporatestrategy can help identify the threat of competitors and suggest the ideal method of production, I.E whether outsourcing would be more effective or not. International strategies depend on the internal capabilities of the firm and also the external variables that can affect their strategy and overall outcome.
Gerry Johnson implied that there are 4 variables that must be considered when devising a corporatestrategy. These are sources of competitive advantage,...

...1. Definition of industrialclusters....?
2. Objectives
3. Features
4. Advantages
5. Disadvantages
6. In which area which clusters are used.....?
Definition
A geographical concentration of interconnected companies with close supply links, specialist suppliers, service providers, and related industries and institutions; for example, Birmingham-Aston-Wolverhampton-Walsall in the British West Midlands, or the UK met cluster, which extends from Lancashire and Yorkshire to London and south-east Britain.
Industrialclusters arise because of clustering and external agglomeration economies; supportive local social structures and networks of exchange; institutional embeddness; and lowered transaction costs of transport and communications, all interacting with the benefits of existing supply locations in close proximity. Existing business clustering strongly encourages further concentration. Clustered concentrations have significant competitive advantages in global markets.
Clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field that are present in a nation or region. Clusters arise because they increase the productivity with which companies can compete. The development and upgrading of clusters is...

...CRITICALLY ANALYSE PORTER'S DIAMOND THEORY.APPLY IT TO EXPLAIN THE INTERNATIONAL COMPETITIVENESS OF AN INDUSTRY OF YOUR HOME COUNTRY.
Overview of Porter’s theoretical perspective
The theory of Porter is a study which works as a tradition that is related to the neo-classical economics with the nature of self adjusting nature of markets. The theory of Porter places innovation and industrialisation of geographic which is one of the number of theories for competitive advantages which aims at the process and development (O’Connell et al., 1997). The industries which work within the nations are focused by the Porter’s theory. Competitive advantage is given by the home nation with certain characteristics and concentration of geographic and this process is enhanced by the rivalries. The systemic character of the Porter’s Diamond Model is shown in Figure 1 which outlines the components of it. Although, determinant of diamond theory interact each other but the systemic natures variable in diamond theory. The arguments on two elements are raised by the Porter which are – concentration of industry geographic and the domestic rivalry and these two elements has simply a great power to make a system by changing this diamond. It promotes the entire national diamond upgrading because of this domestic rivalry. The Porter...